NANTONG Qiangsheng Photovoltaic Technology Co announced yesterday it will build a solar power plant in Jiangsu Province that will use its lower-cost thin-film technology, and said the move means China's solar energy usage enters a new era.
Most Chinese solar equipment makers now use polysilicon as the material to convert sunlight to electricity, while others led by Qiangsheng use the emerging thin-film technology.
Qiangsheng's one-megawatt plant in Rudong in the province will cost 28 million yuan (US$3.9 million), only about 40 percent of the cost to build a plant of the same capacity with polysilicon-based cells, Chairman Sha Xiaolin said.
"It's low cost and it will be connected to the grid," Sha said. "This heralds a new stage as what we see today in China are mainly projects of less than 1MW in capacity or larger ones that are off the grids."
More than 90 percent of China-made solar cells and panels are exported due to no subsidies or tax incentives for domestic generation. Only 20MW were likely to be installed domestically in 2007.
Polysilicon prices have been rising rapidly over the past years due to a tight supply, threatening margins for traditional solar firms. Currently, the cost is five to six yuan per kilowatt-hour in China for traditional solar power generation, about 10 times conventional coal-fired generation. Sha said its Rudong project's cost is slightly more than two yuan per kwh.
"Price is the key. The government is encouraging such renewable (energy), but it seems wind has more support (from the government) now," Sha said. "For solar, the government reviews projects case by case while deciding the on-grid prices."
Sha expects the National Development and Reform Commission to set the on-grid price at about three yuan per kwh for the Rudong project, which will be done by August, giving a payback period of 11 to 12 years.